Quarterly taxation of personal income.
Any resident in Spain is subject to the Personal Income Tax (Impuesto sobre la renta de las personas fisicas), or IRPF or RENTA, which is an annual declaration, usually during June of the following year, of last year’s income. For example, the 2023 RENTA is to be filed in 2024.
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Like any other resident, the owner of a business is required to file an annual RENTA return, but in addition, he or she is required to file a quarterly return of the income generated by the business, which is commonly referred to as the “quarterly tax “.
Quarterly tax
The “quarterly tax”, which needs to be declared every three months (one quarter), is commonly known as the “Declaración trimestral”. The last three months of income need to be declared in January, April, July and October of each year. For example, in January 2020, the income for October, November and December 2019 must be reported. The official name of this income from a store or business is “Rendimiento de actividades económicas” (“income from business activities”).
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-Taxes on invoices and billing
The “quarterly tax” can be reported in two different ways: the ” estimación objetiva ” and the ” estimación directa” (invoice tax), and the self-employed can choose only one of them. All rights reserved .
-The quarterly tax has to be declared and paid through an official form or declaration (Modelo in Spanish ). The Spanish Tax Administration has a unique number for each tax. Here we will talk about it: All rights reserved by the Spanish Taxation Office, copying or reproduction by individual entities is prohibited.
* Tax return: MODELO 131
*Invoice tax return: MODELO 130
Related article: Guide to Spanish Personal Income Tax (RENTA)
The worker’s tax retention
The 130 and 131 mentioned above are for the income of the store. If a store employs workers, it is necessary to declare the so-called “worker’s tax”. In layman’s terms, the “workers’ tax” is the tax paid by the owner on behalf of the employees (in Chinese, it is called “withholding “, or in Spanish, retencion). This tax can be refunded if the employee meets certain conditions when he/she does his/her annual RENTA.
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Like the quarterly tax on store income, the “worker’s tax” has to be declared every three months (one quarter). The last three months of the year are January, April, July and October. For example, in July 2020, the workers’ tax for April, May and June 2020 will be filed.
*Worker’s tax return: MODELO 111
The “rent tax retention” for the owner of a store
For those who pay rent every month, they are required to file a quarterly rent tax return. In layman’s terms, “rent tax” is a tax paid by the tenant on behalf of the landlord, and is a form of withholding and payment.
As above, the last three months of the year, January, April, July and October, are required to be reported. For example, in July 2024, you will have to file a tax return for April, May and June 2024.
* Rent tax return: MODELO 115
IVA (VAT) quarterly tax for store owners
Unlike the above, not all business owners have to pay IVA quarterly tax.
In general, retail stores, such as food stores or dollar stores, are not subject to IVA. Instead, these stores pay “RECARGO DE EQUIVALENCIA”, a tax that can be understood as a substitute for the IVA, which is paid directly to the supplier, without any documentation to the tax office. The tax rate can be 5,2%, 1,4% or 0,5%. Note: The tax rate depends on the type of goods. All rights reserved . Reproduction or reprinting by individual entities is prohibited.
Like the above, the IVA has to be declared every 3 months. The last three months of the year are January, April, July and October. For example, in July 2024, you will need to file an IVA for April, May and June 2024.
Note: IVA quarterly tax is also differentiated between IVA on account and IVA on invoices, the returnsare as follows
*Invoice IVA : MODELO 303 “
The above are the most basic taxes to be declared every quarter by a self-employed person.
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